Hinge Health Q2 Earnings Call Highlights

Key Points

• Hinge Health exceeded expectations in Q2 2026, with revenue rising 53% year over year to $213 million, operating margin expanding to 29%, and free cash flow reaching $100 million. Stronger member engagement drove the revenue beat and helped support higher profitability.
• The company raised its full-year outlook to $856 million–$860 million in revenue and $236 million–$244 million in operating income. Management also authorized an additional $300 million for share repurchases after buying back approximately 480,000 shares during the quarter.
• Hinge Health is broadening beyond musculoskeletal care through its planned $105 million acquisition of Cylinder Health, adding gastrointestinal services, while its migraine program and sales pipeline continue to gain traction. Cylinder is expected to contribute $7 million–$8 million of 2026 revenue, though integration and profitability improvements may take one to two years.

Hinge Health NYSE: HNGE reported second-quarter 2026 revenue of $213 million, up 53% from a year earlier and above the company’s prior guidance range of $200 million to $202 million. The digital healthcare company also raised its full-year revenue and operating-income outlook, citing durable improvements in member engagement, or yield, alongside continued margin expansion.

Co-Founder and CEO Daniel Perez said the quarter provided another indication that the company’s strategy of automating care delivery is gaining traction. Hinge Health’s core musculoskeletal, or MSK, business remains its primary platform, while the company is expanding into migraine and gastrointestinal care.

Revenue growth and cash generation

Hinge Health’s last-12-month calculated billings reached $862 million, up 52% from $568 million a year earlier. The company defines calculated billings through average eligible lives, yield and average selling price per member. Management said billings serve as a leading indicator of future revenue growth.

Chief Financial Officer James Budge said second-quarter revenue outperformance was driven by better-than-expected yield, while eligible lives and average selling price tracked in line with prior expectations. The company attributed yield gains to targeted enrollment campaigns, member referrals and returning members.

Hinge Health reported the following second-quarter results:

• Revenue of $213 million, up 53% year over year.
• Income from operations of $62 million, more than double the prior-year period and above guidance of $50 million to $52 million.
• Operating margin of 29%, compared with 19% a year earlier.
• Gross margin of 87%, up from 83%, including an approximately 100-basis-point benefit from a one-time tariff refund.
• Free cash flow of $100 million, compared with $33 million in the second quarter of 2025.
• Free-cash-flow margin of 47%, up from 23% a year earlier.

The company ended the quarter with $476 million in cash and equivalents, before the expected cash payment for its planned acquisition of Cylinder Health. Hinge Health also repurchased approximately 480,000 shares for $26 million during the quarter and said its board approved a new $300 million share-repurchase authorization.

Expansion into gastrointestinal care

Hinge Health signed a definitive agreement to acquire Cylinder Health for $105 million in cash, a transaction expected to close late in the third quarter. Cylinder provides digestive-health services and has nearly 100 clients covering 2 million lives, according to management. Perez said Cylinder has treated 150,000 people over its lifetime and has partnerships with two of the three largest pharmacy benefit managers and three of the five largest national health plans.

Management said GI conditions represent a significant unmet need, citing estimates that digestive-health issues affect one in four U.S. adults and that 69% of U.S. counties lack a gastroenterologist. Perez said GI conditions also have substantial overlap with MSK, pelvic-floor and migraine conditions that Hinge Health already addresses.

Hinge Health expects Cylinder to contribute approximately $7 million to $8 million in revenue during the remaining roughly four months of 2026. Budge said that implies a business generating roughly $20 million to $25 million in annual revenue during 2026. The company expects broader scaling following product integration and a full sales cycle, with more significant expansion anticipated in 2028.

Management expects Cylinder to initially operate at a loss, but said it aims to bring the business toward Hinge Health’s profitability profile within one to two years. Integration work is expected to take roughly nine months, with completion targeted by summer 2027. Budge said associated costs are included in the company’s guidance and that Hinge Health is maintaining its longer-term target of operating margins above 35%.

Perez said the company is evaluating the future of Cylinder’s gut-microbiome product component. He added that laboratory testing can be an important part of GI evaluation and noted Hinge Health’s ability to refer members for tests through providers such as Quest and Labcorp.

Migraine, sales pipeline and commercial momentum

Hinge Health said its recently launched Migraine Care Program has enrolled more than 450 clients covering over 5 million lives. More than 10 health plans have activated the program for clients under their partnership contracts. Management said early enrollment and engagement metrics have met expectations.

The migraine offering is delivered through the same application as Hinge Health’s digital physical therapy program. Perez said members who use both programs are charged as one subscribing member, rather than as separate subscriptions. The company expects migraine to contribute approximately 10 to 20 basis points of yield improvement in 2027.

President Jim Pursley said the active sales pipeline is ahead of the prior year, while win rates are also higher year over year. He highlighted a win with a Fortune 15 company in which Hinge Health displaced a competitor and secured nearly 300,000 lives.

The company also reported progress in the small- and medium-sized business market. Lives in the SMB channel more than doubled in the first half from a year earlier, according to Pursley. A large national health plan selected Hinge Health as the default option for its SMB clients with fewer than 3,000 lives, using an opt-out model expected to begin adding clients in early 2027.

Hinge Health said clients have also signed up for a planned 2027 launch of HingeSelect with surgery, its offering intended to cover physical therapy, surgery and recovery. Its provider network now includes more than 5,000 locations.

Raised 2026 outlook

For the third quarter, Hinge Health forecast revenue of $223 million to $225 million, representing 45% year-over-year growth at the midpoint. It expects income from operations of $61 million to $63 million, or a 28% operating margin at the midpoint.

For full-year 2026, the company raised its revenue outlook to $856 million to $860 million, representing 46% growth at the midpoint. It increased projected income from operations to $236 million to $244 million, compared with prior guidance of $217 million to $227 million.

Management now expects full-year yield of approximately 4.45%, while eligible lives and average selling price are expected to remain consistent with prior assumptions. Budge said the higher outlook reflects yield gains as well as cost discipline, without changing the company’s growth plans.

About Hinge Health (NYSE:HNGE)

Hinge Health NYSE: HNGE is a digital musculoskeletal (MSK) clinic that provides end-to-end solutions for the prevention and management of musculoskeletal conditions. The company's platform combines wearable motion sensors, personalized exercise therapy guided by licensed physical therapists, and behavioral health coaching to deliver tailored treatment plans. By integrating technology with evidence-based clinical protocols, Hinge Health aims to reduce pain, improve mobility and decrease reliance on more invasive interventions such as surgery or opioid prescriptions.

Founded in 2015 and headquartered in San Francisco, Hinge Health partners with employers, health plans and other payers to offer its self-directed, app-based programs.

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